Alan Is a Retired Economist Who Enjoys Building Toy Trains

question 28

Multiple Choice

Alan is a retired economist who enjoys building toy trains for his grandkids.He uses a workbench and tools from his garage,lumber he bought from the lumber store for $10,and varnish and paint he had left over from another project last year.Since a retired economist is always an economist,which of the following statements does he make about building toy trains?

• A) I'm not paying for any resources,so the toy trains I'm building are a good example of free goods.
• B)I only paid $10 for the lumber,so the toy trains I'm building are a good example of free goods.
• C)I'm using scarce resources to build the toy trains.
• D)The resources I'm using to build the toy trains are not scarce.
• E)If I had used lumber that I cut from the tree in my backyard instead of buying it from the store,then the toy trains I'm building would be a good example of free goods.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership equity in the company.

Cash Dividend

A financial disbursement by a corporation to its stockholders, often as part of the company's profit sharing.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the number of outstanding shares.

Common Stock

Equity ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.